Comments

1. Re: Air France:

   They probably access Twitter through a CRM tool using the Twitter API.

   Based on other firms, the new management at Twitter probably wanted to charge them in the mid to high five figures per month to maintain that API access.

   The cost per interaction under the new structure was likely unjustifiable, especially relative to other means of communication.

2. In response to your “The Path to Abundant Air Travel” opinion piece. You are effectively taking the Texas attitude of libertarian values until those conflict with conservative values. You suggest privatizing security taking it away from the TSA, but requiring government standards to be met and argue that it would be more efficient. First, the TSA was a direct response to the 9/11 attacks. We had private security at airports prior to then that adhered to government standards, and we lost over 3000 people as a result of the incompetence due to low wage and benefits they were paying, resulting in poor quality candidates. And I ask, how could privatizing it make it more efficient? I go through these checkpoints and the only thing they could do to improve it is to provide additional staffing. They get people through pretty fast; the problem is volume. I’m sure they would welcome your critiques on how they could be more efficient since you claim to be an expert on what they do.

   ATC, again the problem is staffing, and the comes down to money. Privatizing won’t change that, and in fact would likely exacerbate the problem because private companies seek to maximize profits. Could the government improve technology quicker? Yes they could. But privatizing won’t make that happen any faster while keeping us safe. Again, the problem is money, or lack of it. Higher salaries to attract more and higher quality controllers, and more money for better technology. Don’t decrease the standards. And the airlines have the ability to pressure the FAA to act faster on these fronts.

   New Airlines – You say the heavy regulation stifles new airlines and they have to buy operating certificates. I disagree with you on this point too. Yes, regulation is expensive, but look at the safety record improvement over the decades. Those operating certificates were developed through trial and error. The airline developed policies and procedures to ever improve safety, learning from mistakes, incidents and yes, accidents. Why on earth would you want an airline to start from scratch? We saw what happened with easyjet back in the 90’s as they ran a cheap operation and ended up killing people because they didn’t have proper processes and procedures in place to prevent an faa violation that killed a bunch of people. Those regulations exist to protect you and I. Spirit airlines is safe because they bought an operating certificate and benefited from the experience of a predecessor airline. There are plenty of operating certificates out there to purchase.

   I will agree that there has been too much consolidation. But that has been both a benefit and a problem for us. We now have three truly major international airlines in the US. United, American, and Delta. Add to that Southwest as a major domestic, and then the others like Alaska, Spirit, Jet blue, and Frontier. I agree that Jet Blue purchase of Spirit is effectively taking a ULCC out of competition and will not be good for the consumer and that should be defeated. In fact I am now opposed to pretty much any more mergers unless you create an national, and eventual international ULCC. Imagine Spirit/Frontier flying to Europe and Asia. But merging just to have one less ULCC, nope. And Jet blue buying Spirit, it makes no sense for the consumer.

   More capacity at airports. While I agree we need additional capacity, I disagree that privatizing airports will both increase capacity and at the same time improve them for the consumers. First, you are ignoring the role the Aviation trust fund plays in expanding airport layouts. This is a major source of funding for airports in terms of anything airside. Terminals on the other hand are almost 100% local funding. If private airports were feasible, and building a new DIA, DFW, or LAX were fiscally feasible, don’t you think Amazon would have started one up by now? The fact is airports are a money pit. And making them profitable for a private company means increasing already high fees which gets passed onto the consumer. The reality is that airports are highly subsidized to benefit the local economy, making them cheap for airlines to use. The model works.

   You mention constraints that benefit incumbent airlines such as AA at DFW, or Delta at DET. Lack of gates isn’t the problem at any airport. Airports build additional gates when demand justifies them. Land constraints are the only limitation, which is at very few airports.

   New airports are more about availability of land than anything else. LAS is planning a second airport because Maccaran is land locked and has no ability to expand. This was a lack of foresight by the locals, who 20 years ago were worried that new gambling competition from local casinos popping up all over the country as we relaxed gambling regulations would destroy gambling in Vegas leading them to start up National airlines, which died with 9/11, and never restarted. The Mccaran of then verses now are two different stories. They couldn’t foresee the boom that the city would have over the coming 20 years. But the new airport was on the drawing board even before then. The problem will be access because they are going to build it way south of town in the wide-open desert. I guess they will have to build a train or something.

   But to that you have to look at the boondogle that has become of the St Lous Mid-america airport which was built to relieve and compete with STL. The great white elephant it became. When it was built STL was struggling with capacity issues, and TWA needed relief. Southwest was new to the airport and STL build terminal E for them. The added traffic gave TWA arrival rates of 45 per hour due to the paralleled runways being to close together and ATC had to stagger arrivals. STL build W1W and then TWA was bought by AA, AA downsized then de-hubbed STL and now STL is struggling to remain viable. Terminal D is mothballed, now STL is planning to build a new terminal to replace what is there. Albeit 30 years too late. So while Mid-America was always built on a pipe dream, STL was in decline. People questioned Mid-America when it was being built, and now 25 years later, it still is looking for a purpose.

   You wrote of privatizing airports. The problem is simply a lack of access to federal trust funds that public airports can access. Another if favoritism. Access to airports by airlines can be bought and paid for. Do you think the majors would pay good money for exclusive access to DFW or AUS? Do you think that private companies wouldn’t take advantage of their monopoly and intentionally constrain gates so as to create a profitable lottery and bidding system with gates going to the highest bidder?

   In regards to slot constrained airports like DCA, LGA, BOS. You suggest that we should auction those slots off, or use congestion pricing. Good ideas worthy of consideration. But again, that would increase the cost of flying into those airports to a per flight cost, which would increase the cost of flying that airport. ULCC’s would never fly there due to the higher costs. The better option is to look at ways to increase capacity on individual flights. That is what the A380 was built for. Instead of flying a 200 passenger A321 into LGA, how about a 500 passenger A380? Can it be done? Physically no, but how about a 777 or A350? Moving more passengers per slot would make a huge difference. As it is airlines use this monopoly power they have over limited slots to constrain the number of seats into these airports by using smaller aircraft. Requiring them to diverse themselves of slots and giving those slots to other airlines, then requiring higher capacity aircraft will increase seats, capacity and as a result, costs.

   Another issue with airports is a failure to manage gates properly. How many gates sit empty for hours on end. So long as an airline has one flight a day at the gate, they can hold onto the lease. How about gate sharing and eliminating exclusivity for gates? The airport manages the hour to hour assignment for gates, with a base schedule, but as flights are early or late, the gate assignment changes, and the airport does the real time re-assignment. This would eliminate stale gates and “gatesitting”. Charge airlines by the hour to occupy a gate thereby increasing their costs if they take too long on a gate. This would increase gate utilization, while increasing opportunities for airlines to come into the airport. It would also reduce the need for terminal expansion to add gates which takes years and a lot of money. This would effectively increase regulation, but with lots of benefits. I personally know this would work, because I have seen what airlines do elsewhere to strangulate gate availability to reduce opportunities for other airlines. This is what we call lost opportunity cost.

   I completely agree with you that we need innovation such as JSX. Regulation does stifle innovation, and airlines like JSX are what help innovate.

3. Ahahaha on the cr@ppy article about regulatory restrictions. That’s exactly what Silicon Valley Bank and its elk successfully argued in 2018, and we’re now all paying the price for believing that load of baloney (First Republic bank failed this weekend, and it’s all traced back to that bout of deregulation).

   God, let’s not repeat the same mistakes with airlines — regulations needs to be IMPROVED, *NOT* eliminated — those are two completely things.

4. You have it wrong with Twitter: Air France is no longer on Twitter for the same reason why you no longer get tornado alerts from the NWS on Twitter: Elon Musk has no clue what he’s doing, and his new poorly thought-out fees are forcing companies to other channels.

5. No fan, but NWS is back online with their weather alerts after a (another) course correction by Elon.

6. @ Jake

   Twitter actually profitable now. So he’s doing well.

7. OH Please. . .STL (and I grew up there so I know) is a $hitshow of a government and the people who run the airport have ALWAYS been on the take. No one wanted the runway extension but it was shoved down our throats at a time TWA was heading towards it’s second (or was it third. . so many) bankruptcy. I loved TWA but it was a hobby, not a viable airline. AA should have let them fail and then bought assets, STL is an awful hub and a declining city. When I moved to MSP in 2000, they were virtually the same size, now MSP is 500 plus thousand bigger and growing. Here in PHX, we were smaller than STL when the Cardinals moved here in 1988, now almost double with a huge investment in high tech and a top ten metro area.

   Lambert need to be replaced (I like keeping the domes and a single concourse) just like KC did, if the politics of STL ever got cleaned up and the county would just take over the city, STL would proper but so long as they “think” they matter, they won’t. Love my Cardinals (as in baseball) but so glad I have called MSP and now PHX home.

8. @unionTHAT I appreciate your point-by-point response to the “conservative libertarian” approach to “improving” aviation in the States.

   Just one bone to pick: how long has LAS been renamed now? Please stop referring to that xenophobic douche whose name preceded Harry Reid.